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CS Executive · Setting Up of Business, Industrial and Labour Laws · Setting up of Branch Office, Liaison Office and Wholly Owned Subsidiary by Foreign Company

Orion Ltd., an Indian company, has a branch in Singapore. The branch keeps proper books of account of its own transactions and periodically sends proper summarised returns to the registered office. Under section 128, what is the position?

Orion is deemed to have complied with section 128(1). Under section 128(2), a company with a branch in India or abroad complies if proper branch books are kept at the branch and proper summarised returns are periodically sent to the registered office or other permitted place.

  1. AOrion has not complied, as all books must be physically kept at the registered office
  2. BOrion is deemed to have complied with section 128(1) in respect of the branchCorrect
  3. COrion must obtain the Registrar's approval for the branch books
  4. DOrion complies only if the branch books are kept in India

Explanation

Section 128(2) says that where a company has a branch office in India or outside India, it is deemed to comply with sub-section (1) if proper books relating to the branch transactions are kept at that office and proper summarised returns are periodically sent to the registered office or other place. The option requiring all books at the registered office ignores this deeming rule.

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